From Volume 8, Issue 7 of EIR Online, Published Feb. 17, 2009

United States News Digest

Pennsylvania, Alabama State Representatives Call for Pecora-Style Investigations

Feb. 12 (EIRNS)—State legislators in Pennsylvania and Alabama have called for Pecora Commission-style investigations of the financial crash and the banking bailouts, beginning immediately. During the 1930s, the Senate Banking Committee's hearings, led by Ferdinand Pecora, exposed Wall Street's malfeasance in bringing about the 1929 crash.

In Pennsylvania, State Rep. Rose Marie Swanger endorsed a call for a Pecora Commission, which got coverage in the Lebanon (PA) Daily News of Jan. 30. Swanger is a second-term Republican and a co-sponsor of State Rep. Harold James' resolution in favor of a Homeowners and Bank Protection Act. In a letter to Pennsylvania Sens. Robert Casey (D) and Arlen Specter (R), Swanger noted that it is the taxpayers who are financing the bailout, and yet we are not told how our money is being spent by banks, nor what has caused this financial debacle. If there have been crimes on Wall Street or elsewhere, they need to be exposed and the criminals prosecuted, the letter said. We need another Pecora Commission, with full subpoena powers, to get to the bottom of this.

In Alabama, State Rep. Tom Jackson submitted HJR118 to the State Legislature; it urges Congress to hold hearings on financial abuses by Wall Street financial institutions. Jackson's resolution reports that the call for a new Pecora Commission originated with Lyndon LaRouche and has been echoed by historian Ron Chernow in the New York Times and elsewhere.

FBI Targetting Major Firms for Fraud

Feb. 12 (EIRNS)—The FBI is targetting 38 major firms for fraud "directly related to the current economic crisis," according to a top FBI official, and ultimately the number could rise into the hundreds. "These are companies, businesses that everybody knows about," said John Pistole, the Bureau's deputy director.

He described the investigations as "large, complex," and similar to the Enron investigation. On other occasions, Federal officials have fingered Lehman Brothers, American International Group, Countrywide Financial, and Fannie Mae and Freddie Mac as under criminal investigation.

Neil Barofsky, the Special Inspector General for the $700 billion Troubled Asset Relief Program (TARP), testified that several criminal cases are underway against firms involved in the bailout. Barofsky added that he is working closely with other agencies and the New York State Attorney General, Andrew Cuomo.

Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.), who chaired yesterday's hearing on corporate fraud, told the witnesses, "I want to see people prosecuted," adding, "I want to see people who have committed such fraud and the havoc it's caused to this country—frankly, I want to see them go to jail."

Material for a new Pecora Commission investigation!

NY AG Cuomo Details Merrill Lynch Bonus Thievery

Feb. 11 (EIRNS)—New York State Attorney General Andrew Cuomo blasted Merrill Lynch in a letter to the House Financial Services Committee Chairman Barney Frank, as it was set to begin a hearing with the CEOs of the major banks. Cuomo, who is conducting a criminal investigation into the matter, expressed his rage at the scam run by Merrill and Bank of America in regard to the executive bonuses: "Merrill Lynch's decision to secretly and prematurely award approximately $3.6 billion in bonuses, and Bank of America's apparent complicity in it, raise serious and disturbing questions." The bonuses were given after BofA had voted to buy Merrill, but before the turnover occurred, so that the bonuses counted as part of Merrill's "losses" in December, for which BofA took $20 billion in taxpayer money from the TARP bailout fund.

Cuomo gives the details: Merrill gave bonuses of at least $1 million each to 696 employees, with a combined $121 million going to the top four recipients. The next four recipients were awarded a total of $62 million, and the next six received $66 million, he said. In all, the bonuses for 2008 totaled $3.6 billion. "Indeed, Merrill chose to make millionaires out of a select group of 700 employees.... It appears that, instead of disclosing their bonus plans in a transparent way as requested by my office, Merrill Lynch secretly moved up the planned date to allocate bonuses and then richly rewarded their failed executives."

Bank of America spokesman Scott Silvestri said his company was as clean as a whistle; that they tried to get Merrill to cut back on the bonuses, but that Merrill was "an independent company" when the bonuses were awarded.

Obama Derides Revisionists Rewriting FDR History

Feb. 10 (EIRNS)—During his Feb. 9 evening White House press conference, President Obama answered a sneering question about the economy and his credibility, by going after the campaign against FDR and what he accomplished, launched by the nostalgic fascists of the American Enterprise Institute.

"We are going through the worst economic crisis since the Great Depression," Obama responded. "Some of the criticisms [of my economic stimulus plan] really are with the basic idea that government shouldn't intervene at all in this moment of crisis. You have some people, very sincere, who philosophically just think the government has no business interfering in the marketplace.

"And in fact there are several who have suggested that FDR was wrong to intervene back in the New Deal. They're fighting battles that I thought were resolved a pretty long time ago."

Brian Ross Runs New Attacks on Murtha, Rangel

Feb. 10 (EIRNS)—ABC-TV's Brian Ross, the TV gutter snipe who smeared Lyndon LaRouche to grease the skids for LaRouche's Alexandria, Va. courtroom frame-up in 1988, has been fed "source" information to run attacks on Democratic Congressmen John Murtha (D-Pa.) and Charles Rangel (D-N.Y.), both leaders of key money committees in the 111th Congress who are not inclined to give away the store to financial speculators.

Speaker Nancy Pelosi (D-Calif.), whom LaRouche has demanded be removed, created this targeting apparatus with her "ethics" legislation of 2007, which polices Congressmen and staff, while allowing the Federal Reserve to shovel $8 billion to bankrupt banks in total secrecy.

Brian Ross's "Blotter" on Feb. 9 features a story from "sources" who reveal for the first time that the FBI raided the Virginia headquarters of lobbying group PMA in November 2008. PMA was founded by former Murtha aide Paul Magliochetti. This preceded, and likely provided some pretext for the FBI, IRS, and Defense Criminal Investigative Service to raid Kuchera Industries and Kuchera Defense Systems outside Johnstown, Pa., in January 2009. An FBI agent told one Kuchera employee that the raid was about "shock and awe." Ross and the right-wing press report the unsurprising facts that Murtha's representation results in Federal money for his district; that companies in his district have lobbyists; and that both the companies and the lobbyists contribute to Murtha's campaigns—along with those of other Democrats and Republicans.

Elements in the U.S. Department of Justice have been waging a vendetta against Murtha, since he emerged from the DOJ's attempt to entrap him in its Abscam targetting of the Congress in the late 1970s, without even being indicted, and then, together with Rep. Joe McDade, organized the passage of the McDade-Murtha bill, with penalties to curb such prosecutorial abuses in the future.

Ross also targets Representative Rangel, complaining that the Ethics Committee investigation of Rangel isn't going anywhere; that its hearings have been completely secret; and complaints can only be made by members. Rangel himself asked for the investigation of his actions.

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